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22
FRIDAY,MARQH 18, 1988.
Israeli Middleman Eisenberg
Has Dubious World Reputation
HESH KESTIN
Special to The Jewish News
B
y all odds, Shoul
Eisenberg is the
world's greatest mid-
dleman.
Written on the far frontiers
of 20th-century capitalism,
his story reads like The Mer-
chant of Venice bizarrely
grafted onto TV's Dallas,
then transmogrified into
some Far Eastern potboiler
by James Clavell. Now 66 and
entering the twilight of his
career, Eisenberg has a-
massed little honor, many
enemies and a fortune worth
$500 million.
How has Eisenberg, an Is-
raeli, accumulated such
wealth? Whether in Japanese
or Yiddish, Eisenberg is the
world's foremost practitioner
of economic karate: the con-
centration of financial force to
disarm, disable and dominate.
By first befriending, then
beguiling and ultimately buy-
ing those in a position to
award centimillion-dollar gov-
ernment contracts, Eisenberg
has sliced off juicy percen-
tages of deals that built
dams, funded plants and im-
plemented giant development
schemes around the Third
World.
According to a former sen-
ior employee, Eisenberg de-
mands 6% but will settle for
5% or less. Eisenberg claims
he earns his fees, that in
many client countries noth-
ing would get done were it not
for him. There is doubtless
some truth to that. But Ei-
senberg's greed and chutzpah
are legendary: Nobody loves
a middleman.
In one case, the building of
a $150 million glass plant in
China by Britain's Pilkington
Plc., Eisenberg used his
Beijing contacts to demand
12.5% of a deal he had noth-
ing to do with. He has
claimed to have put in $13
million, but that's only 8.6%.
Much of this cash investment
may turn out to be in lieu of
his "commission."
What made Eisenberg so
indispensable to the Chinese
that they were willing to cut
him in? Why did Beijing al-
low him to fly his private Boe-
ing 707 into China when the
chairmen of major Western
companies were waiting for
visas? Partly it is Eisenberg's
reputation for getting things
done in the Far East (espe-
cially in Japan, South Korea,
Vietnam, Thailand and the
Philippines). Partly it is
lavish gifts and the odd per-
sonal favor. But most impor-
tant, Eisenberg was able to
deliver something the Chin-
ese really needed: the modern-
ization and repowering of
Soviet-designed tanks and ar-
tillery — by Israel.
Eisenberg has long been Is-
rael's leading private arms
broker. His 500-strong inter-
national dealing staff is pep-
pered with former Mossad
operatives, Israeli army of-
ficers, ambassadors and com-
mercial attaches. Avraham
Shalom, the discredited for-
mer chief of Shin Bet, Israel's
FBI, now works for Eisen-
berg in New York.
Eisenberg's has been a long
and winding road. On the eve
of World War II, as a 19-year-
old Jewish refugee from the
Nazis, the Munich-born
Eisenberg ran to ground not
in Tel Aviv but in Shanghai.
Then, in 1940, he arrived in
Tbkyo.
Savor the paradox. There,
in the home of Hitler's Asian
ally, Eisenberg sat out the
war. He married the Eurasian
scion of a Japanese noble
family and made useful
friends — and money. At
war's end, few questions were
asked. As a nonenemy alien,
Eisenberg supplied raw ma-
terial to Japanese industry
and finished goods to the U.S.
Army of Occupation.
But nobody loves a mid-
dleman. The Japanese began
dealing direct. So, in the
mid-1950s, Eisenberg boldly
leapt again, this time to
South Korea.
Eisenberg's Korean acti-
vities are outlined in a 1978
U.S. congressional report of
hearings into Korean-U.S.
relations. Reads the report:
"Though U.S. Ambassador
Philip Habib had warned
American firms to avoid Ei-
senberg because of his reputa-
tion for making kickbacks,
President Park issued in-
structions in early 1973
that the Korean government
should favor Eisenberg as a
source of financing for com-
mercial projects. Park was
reported to have favored
Eisenberg because he had
provided the junta with
needed funds in the early
1960s, when the U.S. was
turning down development
projects it considered imprac-
tical . . . Eisenberg had a rep-
utation among the Korean
business community for ob-
taining contracts by paying
commissions of up to 25% to
influential Blue House staff
members."
Nothing tells Eisenberg's
Korean chapter better than
the 1976 Canadian nuclear
reactor affair. Armed with in-
Eisenberg: the world's greatest
middleman.
side knowledge that Canada
was having trouble selling its
Candu reactors, Eisenberg
showed up in Ottawa, promis-
ing to offload one in Seoul.
Although Westinghouse had
sold South Korea two nuclear
reactors, and despite U.S.
pressure on Seoul to keep
buying from the same source,
Eisenberg virtually stole the
sale.
Having made the deal, Ei-
senberg presented the Cana-
dians with a bill for $20
million. The amount was later
bargained down to $15 mil-
lion, on Eisenberg's condition
that he represent Candu on
any future Korean sale, and
Canada's condition that
Eisenberg provide an item-
ized list of his expenses.
These turned out to be bits of
paper from firms tied to his
United Development Inc.,
registered (like most every-
thing he owns) in Panama.
The upshot: a major politi-
cal scandal in Ottawa, dismis-
sal of high Korean officials,
including the prime minister
— and the beginning of Ei-
senberg's end in Seoul.
"He burns himself," says
one intimate Eisenberg ob-
server, who asked to remain
anonymous. "Tbday he is not
active in Korea or Japan.
Somewhere along the line he
overdoes it."
By the 1960s Eisenberg
was active worldwide. He
represented large European
companies, including ICI,
Fiat, M.A.N. and Siemens, as
well as Japan's Hitachi and
Mitsubishi. U.S. clients in-
cluded Cincinnati Milacron,
Combustion Engineering and
GATX.
Traveling on an Austrian
diplomatic passport (he is
Vienna's honorary consul in
South Korea), and with domi-
ciles in Tbkyo, London and
Zurich, Eisenberg's true
home was in the Boeing 707
that had been refurbished
with two bedrooms, an office